"We're not ruling out that somebody there is still alive," Wilfredo Tamayo told reporters. "You can never tell."

It is now mroe than three days since the ship lost engine power, ran aground and then overturned during a powerful typhoon.

Only 43 people have been found alive so far and hope is quickly fading of finding more and rescue operations have been hampered by strong waves and high winds.

The sinking could be one of the Philippines' worst shipping disasters in two decades.

'Bodies floating'

Divers are now trying to extricate the bodies [AFP/Philippine Coast Guard]
Lieutenant Colonel Edgardo Arevalo said the divers had reported that poor visibility inside the ship made it impossible to give more detail about the dead found inside.

"Most of the bodies were floating … trapped inside," he said.

"It was too dark inside to tell how many were children or elderly, but they did say they were mostly floating and they were apparently trapped inside."

The 23,824-tonne vessel went belly-up on Saturday as Typhoon Fengshen struck the central Philippines. Only the tip of the ship's upturned bow remains above water.

The ship's position had raised speculation that some passengers may have survived in air pockets, but on Sunday divers heard no response when they hammered on the hull.

Arevalo said the waters were still quite rough, making it difficult to enter and exit the sunken vessel.

"What complicates our problem is how to extricate the bodies," he said.

"One of the ways they are thinking about is to weigh them down so they can take them out from the bottom of the ship. Another option is to cut the hull."

Compensation

Al Jazeera's Marga Ortigas reporting from Cebu city says government agencies and Sulpicio Lines, the ship's owner, have set up helpdesks at the company's main office to help people locate their missing relatives, promising what it calls "adequate compensation".

Sulpicio Lines has a spotty safety record and has lost vessels before.

"So far we haven't gathered all the info so we cannot give any assessment at the moment," Edward Go, owner of the shipping line, told Al Jazeera.

Lieutenant Commander Armand Balilo, a coast guard spokesman in Manila, said there were unconfirmed reports of dozens of survivors being found in nearby islands.

He said they recently discovered that another ship, transport vessel Lake Paoay, had also gone down in the same area on Saturday, leaving three people dead and another 17 missing.

Typhoon toll

Meanwhile Philippine authorities confirmed at least 100 typhoon-related deaths in the worst-hit southern and central Philippines and 55 others still missing.

The National Disaster Coordinating Council said the toll did not include casualties from the MV Princess of the Stars.

Typhoon Fengshen destroyed thousands of houses and rice stores, displaced hundreds of thousands of people and badly damaged much of the region's already fragile infrastructure.

More than 200,000 people were forced to evacuate in the worst-hit province of Iloilo, according to a Red Cross estimate.